Consumer Vulnerability Strategy: Prepayment meters

We have published our revised Consumer Vulnerability Strategy for consultation. Please contact CDconsultations@ofgem.gov.uk if you would like to engage with us on the strategy.

Increasing numbers of consumers in the domestic energy market have prepayment meters (PPM). Our research shows that PPM customers tend to have high vulnerability representation.  

PPM customers face particular barriers to accessing better deals such as fewer competitive tariffs, installation, removal and warrant charges and upfront security deposits. We want to remove these barriers to make sure that prepayment customers can access better deals by switching to other PPM tariffs or to other payment methods, where appropriate.

In December 2015 we published our proposals to improve outcomes for prepayment customers that have since been implemented. A principle outcome were changes to warrant use and charges.

Prepayment meter price cap

From 1 April 2017, the amount of money a supplier can charge a domestic prepayment meter (PPM) customer will be subject to a transitional price cap. We are responsible for updating the cap every six months. The level of the cap for the most recent and any previous charge restriction periods can be found on our Prepayment meter price cap page. 

Self-disconnection and self-rationing

Self-disconnection occurs when prepayment meter (PPM) customers experience an interruption to their electricity or gas supply due to a lack of credit on their account or meter. Closely associated with this is self-rationing for PPM customers. This is when customers may deliberately limit their energy use to save money, or restrict spending in other essential areas in order to keep their meter topped up.

We are concerned about the impact of self-disconnection and self-rationing on PPM customers and the level of support provided to these customers. In November 2018 we launched a call for evidence  to gather evidence on the scale of the problem, quality of support and supplier practices in this area. The call for evidence closed on 10 December 2018. We will consider all the evidence received and publish a summary of responses and our proposed next steps by Spring 2019. 

Changes to warrant uses and charges

In January 2018, measures took effect to protect consumers from detrimental effects as a result of having a prepayment meter installed under warrant. As well as a £150 cap on charges for installing pre-payment meters under warrant for customers in debt, these measures prohibit suppliers levying any prepayment meter warrant charges in some circumstances (for example for people in severe financial difficulty) and banning installations entirely for people for whom the experience would be severely traumatic, for example due to mental health issues.

Debt Assignment Protocol

The Debt Assignment Protocol (DAP) is the mechanism that suppliers use to transfer debt between one another when an indebted PPM customer switches supplier. We obligated suppliers to increase the amount of prepayment debt consumers could have when switching from £200 to £500. 

Through the publications and update feed below you can access our publications and outputs produced in relation to prepayment meters.

Publications and updates

  • Published: 23rd Aug 2019
  • Closed: 20th Sep 2019
  • Consultations and responses
  • 1 Associated documents
We are consulting on proposals to improve outcomes for consumers who experience self-disconnection and self-rationing.

  • Published: 12th Nov 2018
  • Open letters and correspondence
  • 15 Associated documents
This open letter launches a call for evidence to all interested parties into the scale and impact of self-disconnection and self-rationing.

  • Published: 10th Nov 2017
  • Decisions
  • 4 Associated documents
Our decision to modify electricity and gas supply standard licence conditions covering installation of prepayment meters under warrant.

  • Published: 3rd Jul 2017
  • Closed: 29th Aug 2017
  • Consultations and responses
  • 24 Associated documents
This consultation invites stakeholder views on our proposed introduction of a new obligation through a supply licence condition addressing issues around the force-fitting of pre-payment meters under warrant.

  • Published: 14th Sep 2016
  • Closed: 9th Nov 2016
  • Consultations and responses
  • 28 Associated documents
This policy consultation outlines final proposals for measures to protect consumers in the process of installation of PPM under warrant for non-payment of debt.

  • Published: 14th Sep 2016
  • Decisions
  • 0 Associated documents
In December we consulted on broad Proposals to improve outcomes for prepayment customers. We have produced a policy consultation on prepayment meters installed under warrant.

  • Published: 17th Dec 2015
  • Closed: 25th Feb 2016
  • Consultations and responses
  • 19 Associated documents
We identified in our prepayment meter (PPM) review in June that consumers with PPMs face particular barriers to accessing better deals in the market.

  • Published: 25th Jun 2015
  • Reports and plans
  • 1 Associated documents
We issued an information request to gas and electricity suppliers to better understand the barriers that prepayment customers face when trying to access competitively-priced energy deals. Our report outlines the key findings and next steps.

  • Published: 12th May 2015
  • Decisions
  • 1 Associated documents
This letter sets out our decision following a statutory consultation on proposed modification to the standard licence condition (SLC) 14.6 of the gas and electricity supply licences.

  • Published: 26th Mar 2015
  • Agendas, minutes and presentations, Reports and plans
  • 1 Associated documents
In October 2014 we hosted a roundtable to discuss prepayment and standard credit payment differentials and potential action that could be taken to support low income and vulnerable consumers who use these payment methods.

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